Theme Parks On Track in Q1

Wizarding World - Universal Studios Theme Park

Dear Mr. Theme Park,

What’s your take on how the industry did after most of the 1^st quarter results were announced?  Better or worse than last year?

-       Barry

Well, Barry, quite bullish!  The first quarter reports put out by 4 of the “big 5” have shown impressive results.

Based on our discussions with people in these organizations, it is fair to state that operators are quite pleased with their numbers when comparing first quarter results of 2016 with those of 2015.  We saw that Disney and Universal had tremendous performance.  While Disney’s revenues were up 9% (Q1 ending January 2, 2016), itself a huge accomplishment, Universal’s revenues increased by a whopping 57.5% (Q1 ending March 2016). 

Cedar Fair and Six Flags have also reported good first quarter results, with Cedar Fair’s revenues up by 25% and Six Flags’ revenues up by 36% (Q1 ending March 2016).  These operators have reported that 2016 season pass sales, group sales, and season dining passes have been well received and are ahead of last year.

Mako - Seaworld Orlando

SeaWorld, who as you know continues to face scrutiny and image issues, just announced today that it had an uptick of attendance by about 83,000 guests.  A portion of this increase was due to the opening of Aquatica in Texas.  The company reported a revenue increase of roughly 3%, although they still experienced a greater net loss than the previous year.  It will take a bit more time before SeaWorld sees the true results of their turnaround plan.  (Orlando is down due to a decrease in Latin American visitation and season pass sales.  Mako opens in June and visitation should improve in late Q2 and Q3.)

Barry, when you consider the price increases that we have seen in our industry over the last 5 to 7 years, one must stop and think that the American public truly enjoys our product offering.

If you took all of the professionally played sports - baseball, basketball, football, hockey, and soccer – and add their attendance together, theme parks still outdraw these sports by a substantial amount.  Last year, it was estimated that over 380 million people visited theme parks, water parks, FECs, and location-based entertainment facilities.  I ask…….what is the national pastime for Americans?  It’s overwhelming “visiting themed attractions.”

Valravn at Cedar Point

When considering the great new capital investments coming on line in the way of attractions in 2016, I would have to say we are in for a great season. It’s a little too early to forecast the percent increases, but we believe the industry is in store for another year of attendance and revenue increases.

As a whole, we have not hit the “pricing wall” yet.  The experimentation and introduction of Dynamic Pricing is going to help the per capita and revenue yields. 

We will have more to say about your question, Barry, around the second week of June, 2016.  Stay tuned and thank you for contacting us.

(Note:  Disney's 2Q Earnings are released on May 10, 2016, and expected to have positive results.)